Electronic Commerce or e-commerce, the exchange of goods and services by means of the Internet or other computer networks, has dramatically changed the way businesses and individuals conduct business. E-commerce follows the same basic principles as traditional commerce, that is, buyers and sellers come together to exchange goods and/or services for money. But rather than conducting business in the traditional way—in stores and other “brick and mortar” buildings or through mail order catalogs and telephone operators, in e-commerce buyers and sellers conduct such transactions over the Internet, using Network Access Devices (NADs), including but not limited to, personal computers or laptops, personal digital assistants (i.e., a BlackBerry® or like device), land-line telephones and/or cellular telephones.
E-commerce provides buyers with unmatched convenience and ease of conducting commercial transactions. Purchasers can visit the World Wide Web (WWW) sites of vendors twenty-four hours a day/seven days a week, compare prices and make purchases, all without the need to leave their homes or offices, or even while on the go. In some cases, consumers can immediately obtain a product or service, such as an electronic book, a music file, or computer software, by downloading the same over the Internet. In other cases, consumers can check inventory at a local brick-and-mortar retailer and pick up the product immediately. In yet other cases, consumers can have orders shipped to the location of their choosing. In order to complete typical purchase transactions, billing information (and any necessary shipping information) needs to be collected, verified and executed in an efficient and secure manner.
For sellers, e-commerce provides a way to cut costs and expand markets. Since business activity is centered around network access devices, networks and servers, there is a reduced need for building, staffing, maintaining a physical location and/or distributing mail order catalogs. Automated order tracking and billing systems that are coupled to a communications network reduce labor costs, and if the product and/or service can be downloaded, e-commerce firms incur minimal distribution costs. By selling over the Internet, sellers have the potential to market their products or services globally, and thus are not limited by the physical location of a store. Internet technologies also permit sellers to track the interests and preferences of their customers, with the customer's permission, and to thereafter utilize this information to build an ongoing relationship with the customer by making recommendations or customizing products and services to meet the customer's needs. Making recommendations to buyers (or potential buyers) is a significant aspect of the Amazon.com Web experience. With this functionality, personalized recommendations are made. For example, when searching for a digital camera, recommendations for accessories (loosely based on purchase and browsing history) such as memory cards, cases, or editing software are made to complement the purchase being considered.
E-commerce, however, also has some practical limits and disadvantages. Consumers are reluctant to buy some products online. Online furniture businesses, for example, have failed for the most part because customers frequently want to touch and feel the quality and comfort of an expensive item, such as for example a sofa, before making such a large purchase. Additionally, shipping costs for large, heavy items can add significant costs to the purchase. Many people also consider shopping a social experience. For instance, they may enjoy going to a store or a shopping mall with friends or family, an experience that cannot be duplicated online.
Security and privacy for financial transactions made over the Internet (i.e., by credit card, checking account, open account or other financial instrument) is a major concern for all potential customers who engage in e-commerce. Established encryption methods such as Secure Sockets Layer (SSL), a protocol developed by Netscape Communications Corporation, encode credit card numbers and other information to foil would-be thieves. Buyers can determine if the site they are using is secure by noting the “secure” icon at the bottom of their browser window. In addition, the address bar of Internet browsers will carry the “https” prefix instead of the standard “http” prefix when the site is secured. Nevertheless, some consumers are reluctant to divulge credit card information over the Web, and this reluctance has hindered the growth of e-commerce. In addition to credit card security, many shoppers worry about privacy. To placate Web purchasers, many Internet stores post “privacy statements” that explain their policy of sharing or not sharing customer information with others. A privacy policy may include refusing to give the customer's name and e-mail address to companies that send unsolicited and unwanted commercial e-mail messages, often known as junk mail or spam. In 2003 the U.S. Congress passed legislation designed to curb the explosive growth of spam. The new law made it illegal for senders of unsolicited commercial e-mail to disguise their identity by using false return addresses or misleading subject lines. Violators were subject to steep fines and possible prison terms. The law also prohibited the gathering of e-mail addresses from Web sites. Sponsors of the legislation estimated that the incredible growth in spam, representing about half of all e-mails, cost Internet access providers $9 billion annually in technology-related expenses necessary to handle the increased volume of e-mail. Clogged in-boxes also annoyed consumers and made it difficult to distinguish between solicited and unsolicited commercial e-mail messages.
Mobile commerce (also known as M-Commerce, mCommerce or U-Commerce, owing to the ubiquitous nature of its services) is defined as any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device. This definition provides for a differentiation of M-Commerce from other related fields such as Electronic Commerce, Electronic Business and Mobile Business.
Mobile Commerce is the ability to conduct commerce, using a mobile network access device (NAD). Examples of M-Commerce NADs are a mobile phone (or cell phone), a PDA, a Smartphone (combining functionality of a mobile phone and a PDA) and other emerging mobile equipment, like dashtop (automotive) mobile devices.
Mobile payment is defined as processing a payment for goods or services with a mobile device such as a mobile phone, Personal Digital Assistant (PDA), or other such NAD. Such systems are also used in developing countries for micropayments. Vendors in Europe including Verrus Mobile Technologies and Easy Park use contactless payment over mobile phones to pay for on- and off-street parking in specially demarcated areas. First conceptualized in the 1990s, the technology has seen commercial use in both Scandinavia and Estonia. Users benefit from the convenience of being able to pay for parking from the comfort of their car with their mobile phone, and parking operators are not obliged to invest in either existing or new street-based parking infrastructure. Payment is usually linked to either the account directly (add to service bill) or linked to a credit card.
In the above examples of e-commerce, m-commerce and mobile payments, a payment is transacted as the service is delivered or about to be delivered. If the transaction is reconsidered and the user would like to cancel or modify the conditions of the transaction, typically the dispute resolution needs to be handled primarily by the user. This can be a time consuming and daunting task for the user to act as the intermediary between the business and the payer (i.e. bank, credit or debit card company, telecom provider, pre-paid provider, or other financial instrument) or with the payer directly.
On-line web surfers often wish to make spur-of-the-moment purchase or donation decisions. Current options like PayPal™ and Amazon's Honor System™ are expensive, as they typically have a per transaction charge plus an additional fee of up to about 3% of the value of the transaction. Additionally, when reconsidering such a transaction, dispute resolution varies greatly with each organization and can be time consuming, frequently not worth the effort given the monetary amount of the transaction.
It would therefore be desirable to enable existing customers of a business who receive periodic electronic billing to transact an impulse buy or donation decision (to a third-party) which is immediately included to their current account balance. Only after the current bill is paid for by the user is the transaction paid by the billing business to the third-party, minimizing risk. The user can reconsider and even cancel the transaction up to the time when the bill is paid, also minimizing risk. To the inventors' knowledge, no such system or method is currently available.